Evening Watch List for September 22nd

Mish Schneider | September 21, 2015

Not So Chillin in Cedar Rapids

Back in July, a video went viral advertising Hillary Clinton’s beer koozie while she awkwardly looks into the camera stating she is ,”Just chilling in Cedar Rapids.”

Monday morning, Mrs. Clinton tweeted that she would take on “price gouging” in the pharmaceutical industry. Like in the movie “Frozen”, the Biotechnology landscape turned to ice.

As much fun as I am sure pundits will have, I see this more as an affirmation that the stock market’s rally on hope over the last several years, continues to decimate as hope turns to fear.

Although I am just a “pisher” in the world of financial giants, I nonetheless wish to do my small part relaying a cautionary tale about too much fear and its domino effect.

Easy to blame Hillary for the Biotech selloff, but really, this market selloff began right around the Iowa campaigning in July ahead of the August kibosh.

What’s Really Hurting the Markets?

“Be careful what you wish for” comes to mind. The bull market that Wall Street loved to hate can now boast a collective self-fulfilling prophecy.

One could say the bull market was merely long in the tooth-and it was. One could say that China and the other emerging markets along with declining commodity prices drove prices lower-and they did.

Let’s not forget that the Federal Reserve did their part as well. Keeping interest rates unchanged sent the clear message, “We are worried.”

Comments by a Presidential hopeful only reinforces the already skittish environment. Recent pessimism on the future of the world by virtually all the other Presidential hopefuls-steeped in reality or not-may continue to result in breaking the spine of the US economy-the Stock Market.

What the Market Phases Tell Us

Biotechnology, I wrote last week, was in the best shape of our Economic Modern Family sectors. Now, it has joined the rest of the group all trading under their 200 Daily Moving Averages.

However, Biotechnology and Regional Banks, both in Distribution Phases, have yet to experience a “Death Cross.” Notably, the NASDAQ 100 ETF QQQ, is in the same boat.

As we continue this week, watch KRE IBB and QQQs for signs of life. Watch the 2 Commodity ETFs (DBC and DBA) I wrote about extensively last week. Both are arising from their doldrums.

Remember cash is a position as well.

Finally, please try to dwell on the positives. Harder to find them since “fear” makes for higher ratings.

So let’s embark on a new collective, self-fulfilling prophecy. Reasons to be cheerful, 1,2,3!

S&P 500 (SPY) Defending 195 which probably means a break below will see a quick trip to 190. Above and its back to watching 200 as resistance Subscribers: Positive pivots SPY DIA Negative QQQ IWM

Russell 2000 (IWM) Another break of 115.30 and will test support at 114, 112, 110

Dow (DIA) 166 pivotal area with support at 162.15

Nasdaq (QQQ) All about 106.95 the 200 DMA. Above good below, next we see if it closes out this week defending 104.00

Volatility Index (VIX) Dropped down the 200 DMA

XLF (Financials) 22.40 closest support. Only good if it clears back over 23.20

KRE (Regional Banks) 36.35 best underlying support. Note that if this can hold over 40.15 that is a decent sign

SMH (Semiconductors) Over 50.85 would be a tempting long swing buy. Otherwise, expect 48-48.50 support

IYT (Transportation) 142.50 support. 146.10 overhead resistance and the 50 DMA

IBB (Biotechnology) 340 pivotal with 347.35 the overhead 200 DMA

XRT (Retail) A monthly close over 45.38 keeps hope alive. Otherwise, looking at 44.00 next closest support

IYR (Real Estate) Tried but could not clear the 50 DMA. Over Monday’s highs it will

ITB (US Home Construction) Like the market, struggles to look good with now, an unconfirmed warning phase

GLD (Gold Trust) 110.50 really good resistance 106.90 support

SLV (Silver) Interesting inside day with support 14.10

GDX (Gold Miners) Could not get the second day confirm on improved phase change- a great tell

USO (US Oil Fund) Looks like its trying hard to bottom-not ready to buy just yet though

UNG (US NatGas Fund) New lows for this year

TLT (iShares 20+ Year Treasuries) Unconfirmed phase change to bearish-needs a second day

UUP (Dollar Bull) Closed right at 25.00 but without a phase change

FXI (China Large Cap Fund) 36.45 level pivotal

DBC (DB Commodity Index) Like better if can clear/hold over 15.25

***Market Tone: Short-term Neutral, Intermediate-Term Negative 5 and Long-Term Negative 5

NOTE: *All starred picks are from the automated list of picks (which now includes short picks!) denote that it has one or more of the 18 chart patterns we have used on the radar screen. For example, inside day, 2 days under floor trader pivots, phase change, brick wall or return to the 10 DMA, etc.

Longs:

ADBE
ALK**
ALKS
AMZN
BBY
BYD**
CAM
CNO**
CRM
CROX**
CTXS
CUBE
CVRR
EA**
EQIX**
EXPE**
FAZ
FBHS
FBR**
HD**
INCY
JBLU**
K**
LGF**
MCD**
MGM
MYGN**
NOC**
P**
PM
ROST
SDS
SRPT
STZ
TPX
TZA
UVXY
VXX